For a market interest rate of 16% per year, compounded quarterly, and an inflati

Question

For a market interest rate of 16% per year, compounded quarterly, and an inflation rate of 2% per quarter, the effective quarterly real interest rate is closest to? A. 2% B. 3% C. 4% D. 6% Formula used: A construction equipment costs $40,000 today. If the market interest rate was 15% per year and cost has increased only by the inflation rate of 6% per year, its cost 10 years ago was closest to: A. $71,600 9. B. $27,40s C.$22,335 D. $17,700 Formula used: 10. An alternative has the following cash flows: benefits = $60,000 per year, disbenefits = $25,000 per year, annual equivalent of initial cost = $30,000; O&M; costs of $10,000 per year. year, the modified B/C ratio is closest to: At an interest rate of 10% per A. 0.89 B. 0.83 C. 0.67 D. 0.64 Formula used

Explanation / Answer

8) The answer is A = 2%

effective interest rate = nominal interest rate - inflatio rate

nominal interest rate = 16% per year.

nominal inerest rate per quarter = 16/4 = 4%

infaltion rate = 2%

effective interest rate per quarter- 4-2 = 2%

9) please uplaid it again. it against chegg policy

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.